Einstein Bros 2013 Annual Report Download - page 27

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10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312514073832/d629623d10k.htm[9/11/2014 10:05:27 AM]
Total manufacturing and commissary gross
margin $ 6,801 $ 8,806 29.5% 21.9% 26.2%
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We closed all five of our commissaries by the end of the first quarter 2012. Sales that were previously made to our franchisees and licensees
by the commissaries are now being handled directly through our distributors. Cost savings resulting from the closures of our commissaries and
other initiatives continue to have a significant positive impact on our margins.
On a year-to-date basis, sales from our manufacturing facility grew by $3.0 million, or 10.2%, to $33.6 million as a result of additional sales
to our wholesalers and additional third party franchise and licensee sales when compared to the same period last year. This increase was partially
offset by a decrease in commissary revenues of $0.5 million, a direct result of the commissary closures.
Franchise and License Operations
Fiscal Year Ended
(in thousands)
Increase/
(Decrease)
January 1,
2013
December 31,
2013
2013
vs. 2012
Franchise and license related revenues $ 11,186 $ 12,534 12.1%
Percent of total revenues 2.6% 2.9%
Number of franchise and license restaurants 355 394
Franchise and license revenue improved by $1.3 million, or 12.1% from fiscal 2012, primarily the result of increased comparable store sales,
continued unit development and an increase in initial franchise and license fee revenue recorded on unit openings. Franchise and license
comparable store sales were +0.4% for the fiscal year ended December 31, 2013. In fiscal 2013, we opened 37 licensed locations and 14
franchised locations, including our first restaurants in Montana, Vermont and Iowa. As of February 21, 2014, we have 27 development agreements
in place for 186 total restaurants, 47 of which have already opened. Based upon the development agreements, we expect the remaining 139 new
restaurants will open on various dates through 2021.
Corporate Support
Fiscal Year Ended
(in thousands)
Increase/
(Decrease)
Percentage of
total revenues
January 1,
2013
December 31,
2013
2013
vs. 2012
January 1,
2013
December 31,
2013
General and administrative expenses $ 39,569 $ 40,350 2.0% 9.3% 9.3%
Depreciation and amortization 19,707 18,203 (7.6%) 4.6% 4.2%
Pre-opening expenses 1,115 1,075 (3.6%) 0.2% 0.2%
Restructuring expenses 480 — ** 0.1% 0.0%
Strategic alternatives expense 3,677 — ** 0.9% 0.0%
Other operating expenses, net 1,592 1,138 (28.5%) 0.4% 0.3%
Total operating expenses $ 66,140 $ 60,766 (8.1%) 15.6% 14.0%
Interest expense, net 3,384 5,970 76.4% 0.8% 1.4%
Provision for income taxes 8,103 7,329 (9.6%) 1.9% 1.7%
** Not meaningful
As a percentage of revenues, our total general and administrative expenses remained flat at 9.3% in fiscal 2013. On May 3, 2012, we
announced that our Board authorized a review of strategic alternatives to maximize value for all stockholders. The review was completed on
December 6, 2012. During the review period, we had a number of open corporate support positions that remained open. Upon completion of the
review, we filled the
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